EDITORIAL: The National Price Monitoring Committee’s (NPMC’s) revelation of a 40 percent differential in wholesale and retail prices of basic food items is shocking, to say the least.
It means there has been no effort to check the age-old trend of middleman manipulation, which includes everything under the sky from hoarding, price fixing and blatantly violating the law of the land.
And it is shameful that the Committee has seemingly brushed this issue aside, for all intents and purposes, by simply directing ministries, departments, and provinces to “remain vigilant and reduce the price difference by improving supplies and overcoming hoarding”.
This betrays a troubling divorce from reality and raises at least two very important points. One, it is not the supply of commodities, or the lack thereof, that widens the trade price cleavage between wholesale and retail markets. The credit goes to unscrupulous elements that would never function so openly without protection from parts of the official machinery. You could raise supplies in a number of ways – all of which would burden the exchequer, of course – but only end up benefitting the mafias and interest groups that control the retail market.
And two, why hasn’t anybody ordered a very severe crackdown on everybody involved in this practice? Surely, NPMC is aware that these are times of unprecedented inflation, not to mention unemployment, and food inflation is still highest among the CIP basket.
So it must also understand that appreciating a drop in the differential from 70pc to 40pc and then getting on with business as usual amounts to rubbing salt in the wounds of a very angry public.
It’s also been reported that the retail market is not reflecting the drop in commodity prices in global markets. Ghee/cooking oil, for example, became more expensive by 4pc in the local market when palm oil prices dropped by 9pc in the international market.
Since this happened at a time when the economy is in deep crisis and the government is bending over backwards for each dollar in international aid it can get, this kind of negligence merits action not just against distortive elements in the retail market but also government watchdogs that were either asleep at the wheel or in on the act.
Yet NPMC officials still “expressed satisfaction over the stabilisation of prices of essential items”. Ordinary people who are already forced to pay ridiculously inflated bills and also unfairly expensive food might have something to say about such statements. It’s clear that the arm of the government meant to monitor and control prices is not only failing in its job, but is also unaware of its real responsibility.
Yet now that the biggest reason for food inflation is known, one can only hope that offices higher than NPMC will take note of this miscarriage of justice. Since everybody tends to jump into effective action at IMF-review time, and one is going on right now, there is some hope that headlines will tell of very serious action against price manipulators soon enough.
Anything less would be a disservice to the nation and an insult to the people who are forced to pay, quite literally, for the mistakes, bad policies, and outright corruption of successive administrations.
Copyright Business Recorder, 2023